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Qulliq Energy Corporation's Response to the Standing Committee On Qulliq Energy Corporation’s Response to the Standing Committee on Oversight of Government Operations and Public Accounts Report on the Review of the 2016-2017 Annual Report and 2017-2021 Corporate Plan of Qulliq Energy Corporation Introduction On September 27-28, 2018, the Standing Committee on Oversight of Government Operations and Public Accounts held a hearing on Qulliq Energy Corporation’s 2016-2017 Annual Report and the 2017-2021 Corporate Plan. The President and CEO of Qulliq Energy Corporation appeared as a witness. In June 2019, the Standing Committee released the Report on the Review of the 2016-2017 Annual Report and 2017-2021 Corporate Plan of the Qulliq Energy Corporation. The report outlines a series of observations and recommendations relating to the following issues: • Board Governance and Status of the Establishment of a Qulliq Fuel Corporation; • Human Resources Management; • Reviews of the Nunavut Electricity Subsidy Program, the Public Housing Support Program, and the Affordable Energy Fund; • Environmental Remediation of Contaminated Sites; and • Alternative Energy and the Arctic Energy Fund. Each of these issues include a set of recommendations, which are addressed in this report. Recommendations are numbered as they appear in the Standing Committee report. The response specifies which department or agency is responding, using the following acronyms: • QEC (Qulliq Energy Corporation); • DOE (Department of Environment); • CGS (Department of Community and Government Services); • DOJ (Department of Justice); • NHC (Nunavut Housing Corporation); and • FIN (Department of Finance). Pursuant to section 91(5) of the Rules of Legislative Assembly of Nunavut, Qulliq Energy Corporation tables this report to the Standing Committee on Oversight of Government Operation and Public Accounts. 2 1. Board Governance and Status of the Establishment of a Qulliq Fuel Corporation 1.1 Recommendation: The standing committee recommends that the Government of Nunavut’s response to this report include a detailed update on the membership and activities undertaken to date by the audit committee of the board of directors of the Qulliq Energy Corporation. Government of Nunavut’s Response (QEC): On November 8, 2018, the Qulliq Energy Corporation Act was amended to include the following: (3) The Board shall establish an audit committee to ensure the critical and objective oversight of the Corporation's (a) reporting of financial information; and (b) practices of strategic management and financial control. The main function of the Board of Director’s Finance and Audit Committee is to review QEC’s financial documentation and reporting adherence. The committee was originally established when Nunavut Power Corporation was formed in 2001. The following is a detailed update on the membership and activities undertaken by the committee since the above amendment took place. Finance and Audit Committee Members: • Simeonie Akpalialuk • Roxanne Ruediger • Ronald Campbell (term expired June 19, 2019) • Bert Rose (term expired May 9, 2019) • Philip Clark (term expired May 9, 2019) • Nelson Pisco (term expired May 9, 2019) New members will be appointed to the Finance and Audit Committee in September 2019 following the four term expirations and appointment of three new directors. Finance and Audit Committee Meeting Dates: • March 5, 2019 • January 10, 2019 • December 20, 2018 Documents Reviewed by Finance and Audit Committee Members: • 2018-2019 Capital Budget and 2019-2020 Capital Submission • QEC CIBC Credit Agreement • Write-off of Portion of City of Iqaluit Account • Write-off of One Statue Barred Double Payment • Write-off of Statue Barred Accounts Receivable 3 • Write-off of Temporary Assets • 2017 Contracting, Procurement and Leasing Activity Report 1.2 Recommendation: The standing committee further recommends that the Government of Nunavut’s response to this report clarify its position concerning the establishment of a Qulliq Fuel Corporation. Government of Nunavut’s Response (CGS): A comprehensive analysis of possible options for Community and Government Service’s Petroleum Products Division (CGS-PPD) is being conducted with a focus on the following options: • Remain within CGS but undertake significant changes to its organizational structure, including transitioning to a commission similar to the Nunavut Liquor Commission structure; • Transition to a subsidiary corporation under Qulliq Energy Corporation; • Transition to a solely independent crown corporation; and • Transition to a new independent Government of Nunavut department or a new department merging with other branches of government. CGS-PPD retained a consultant who is conducting a review of the options. A steering committee consisting of senior officials from the Departments of Executive and Intergovernmental Affairs, Finance, Justice, Community and Government Services (including PPD), and Qulliq Energy Corporation is providing oversight. A working group will be established in fall 2019 to look more closely at options one and two. It is anticipated that a final report will be completed by March 31, 2020. 4 2. Human Resources Management 2.1 Recommendation: The standing committee recommends that that the Government of Nunavut’s response to this report describe, in detail, the results of the Qulliq Energy Corporation’s review of its human resources policies that was referred to in its 2017-2021 and 2018-2021 corporate plans. Government of Nunavut’s Response (QEC): The Human Resources (HR) Division of QEC completed an analysis of all internal policies to identify conflicts and ensure compliance with: • The Government of Nunavut’s Human Resources Manual (HRM); • The Collective Agreement between QEC and the Nunavut Employees Union (NEU); and • The Nunavut Public Service Act and Regulations. This analysis was used to ascertain required policy development and revisions to rectify the identified gaps and better align with the HRM, as well as addressing QEC’s unique operational requirements. Policies within the HRM have an applicability statement that expressly includes or excludes certain employees, departments, boards, or agencies from the policy requirements. Some applicability statements specifically include QEC, while others are more ambiguous. For policies where QEC are not expressly included, the corporation is still required to use the HRM if internal policies and procedures have not been established in that area. For policies that QEC are directed to follow, supplemental provisions may be developed if they do not contradict the HRM. For detailed information about QEC’s review of HR policies, please see Appendix “A”. 2.2 Recommendation: The standing committee further recommends that the Government of Nunavut’s response to this report describe, in detail, the Qulliq Energy Corporation’s casual staffing process, including the process for advertising casual employment opportunities; clarify the extent to which the process conforms to Directive 515 (“Casual Employment”) of the Government of Nunavut’s Human Resources Manual; and provide a detailed listing of casual appointments made during the 2017-2018 and 2018-2019 fiscal years. Government of Nunavut’s Response (QEC): QEC’s temporary hiring process mirrors the Government of Nunavut’s casual staffing process as the corporation’s hiring is conducted pursuant to the Nunavut Public Service Act. Supplemental provisions for the temporary hiring process have been developed. These provisions take into consideration operational requirements and differences within QEC’s Collective Agreement. For detailed information about the provisional differences between Human Resources Manual Directive 515 and QEC’s temporary hiring process, please see Appendix “B”. 5 Like the Government of Nunavut, QEC receives and accepts resumes for temporary employment opportunities and maintains a collection of potential hires. If a suitable applicant is not located within these resumes, QEC’s HR Division will post job advertisements on the corporation’s and Government of Nunavut’s websites, as well as other industry specific job boards. QEC hired 54 temporary employees in 2017-18 and 46 temporary employees in 2018-19. For a detailed listing of these temporary hires, please see Appendix “C”. 2.3 Recommendation: The standing committee further recommends that the Qulliq Energy Corporation make its corporate and human resources policies publicly available through posting on its website. Government of Nunavut’s Response (QEC): QEC ensures that all public policies are published on their website. Internal corporate policies will be made accessible to all employees across Nunavut through QEC’s new intranet network, which is expected to be completed in 2020. 2.4 Recommendation: The standing committee further recommends that the Government of Nunavut’s response to this report provide, in a comparable format to that which was included in Return to Written Question 3-5(2), a detailed breakdown of the Qulliq Energy Corporation’s expenditures on overtime pay during the 2017- 2018 and 2018-2019 fiscal years; and that this information be included in future annual reports of the Qulliq Energy Corporation. Government of Nunavut’s Response (QEC): For a detailed breakdown of QEC’s expenditures on overtime pay during the 2017-2018 and 2018-2019 fiscal years, please see Appendix “D”. QEC commits to providing overtime expenditures in a comparable format in future annual reports. 6 3. Reviews of the Nunavut Electricity Subsidy Program, the Public Housing Support Program, and the Affordable
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